Minn. AG cites Accretive for debt tactics

An Illinois medical debt collection company routinely pressured patients in Minnesota hospitals to pay for services before treatment was given, going so far as to collect at a patient's bedside and in some cases leading patients to decide to skip treatment, according to a report from the Minnesota attorney general.

The allegations are detailed in a six-volume report released by Minnesota Attorney General Lori Swanson as part of a lawsuit she filed in January against Chicago-based Accretive Health Inc., which has contracts with two Minnesota hospital operations. The report accuses Accretive of misusing private patient information and creating "high-pressure, boiler room-style sales atmospheres" in which employees were coached to aggressively collect debt.

One woman whose son needed ear tube surgery at a Fairview hospital was told to make a prepayment and then later told by her insurance provider that she paid four times too much, according to the report. When doctors complained that the collection methods were turning patients away from medical care, a top Accretive official brushed it off as "country club conversation," according to the report.

"What we've uncovered is a culture clash between the mission of a nonprofit hospital, which is to care for the sick and the infirm, and Accretive's goal of making as much money as possible for its private shareholders," Swanson said.

Rhonda Barnat, a spokeswoman for Accretive, said the firm has "a great track record of helping hospitals enhance their quality of care." She declined further comment.

Accretive shares slid 40 percent on Wednesday, plunging below $11 a share, in afternoon trading on the New York Stock Exchange.

The company had net income of $29.2 million in 2011, up from $12.6 million a year earlier. The company's website doesn't list other medical organizations it contracts with. Swanson said Accretive operates at 60 hospitals in 20 states.

Swanson's office regulates charitable organizations in Minnesota, which includes the hospitals that contracted with Accretive. She said the office reviewed over 100,000 records and talked with Fairview employees when compiling the report.

Swanson said Accretive also violated HIPPA by using confidential patient information, without informing patients or asking for permission, in order to tailor the way they collected debt from individuals. Collections were done through financial counselors working in Fairview's facilities and through about 100 collectors working out of Kalamazoo, Mich.

The report said Accretive, in a search for collection targets, identified pregnant women in delivery as so concerned with getting treatment that they "were most vulnerable in getting a pre-balance paid." As one Accretive employee wrote, "We know there is more out there. OB is probably going to help us a lot."

"We need to get cracking on labor and delivery," a Fairview employee responded in an email. "There is a good chunk to be collected there, and we just haven't had the time and manpower to get it done."

Collectors had access to patients' medical conditions and history as well as gender, date of birth, Social Security number, marital status and religion. The report highlights one Fairview patient's history that collectors had access to that showed the patient suffered from depression and once tried to commit suicide.

Accretive's employees worked in Fairview alongside regular hospital employees. Not only did they seek to get patients to pre-pay, but they also coached _ and pressured _ Fairview employees in how to do it, according to the documents.

"We were told if we don't get money from patients in the emergency room we will be fired!" wrote a Fairview employee whose name was redacted in a form included in Swanson's report.

In 2010, Fairview signed a five-year "revenue cycle" contract to let Accretive run its payment services, including billing, registration, scheduling and debt collection. Last month, Fairview quietly ended that contract, though it retained another that has Accretive identifying ways to cut costs.

Spokesman Ryan Davenport said Fairview, which operates seven hospitals and more than 40 clinics in the state, ended the contract "based on the best interests of our patients and our organization."

"We share many of the same concerns that (Swanson) raises in this report," Davenport said. "We've begun to take actions. We'll continue to review concerns that the attorney general's brought to us."

Nancy Chockley, president and chief executive of the nonprofit, nonpartisan National Institute for Health Care Management Research and Educational Foundation, said hospitals have used debt collection agencies for years, but usually to manage collection of funds after services are rendered, not beforehand.

Chockley said hospitals need to collect debts to stay in business, but she called the allegations against Accretive troubling.

"In this country, we operate on a principle that hospitals can't turn you away," she said. "They are targeting very vulnerable people at a time when they are most vulnerable."